Business Credit Cards for LLC Startups in 2024

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  • A small business credit card can help you separate personal and corporate finances.
  • Business credit cards offer many forms of financial protection and often reward you for spending.
  • Read Business Insider’s guide to the best small business credit cards for you.

Business credit cards act very similarly to personal credit cards, providing business owners with a secure way to charge and manage purchases for their company.

You’ll quickly discover that there are dozens of business credit card options for new LLCs. The best business credit cards make it easier to track and separate business expenses, manage employee spending, and even earn rewards based on your company spending.

Benefits of business credit cards for LLCs

A dedicated business credit card for your LLC can have many benefits. These are some of the best advantages.

Easier expense tracking

You should always separate your personal and business finances, especially for accounting and tax purposes. Your business credit card makes it easy to simultaneously shop for your company as well as your home, as long as you divide your items into two separate purchases at checkout. 

Fraud prevention

Since debit cards link directly to your bank account, an unscrupulous thief or hacker may be able to wipe out your business savings if they get a hold of your company debit card. When you pay with a credit card, however, you’ll have an additional layer of protection if your issuer detects fraudulent activity. 

Purchase protection

Many business credit cards offer complimentary purchase protection as a benefit, which can be extremely beneficial if you’re outfitting an office with appliances, TVs, computer monitors, and other high-ticket items. Purchase protection is a form of insurance: Your credit card issuer will replace or repair an eligible product free of charge if it’s accidentally damaged, stolen, or lost within 90 days of your purchase date.

Benefit limits and qualifications will vary from card to card, so read the fine print to know when you should file a claim. 

Business credit card risks

While there are many benefits to using a business credit card for your LLC, there are also some risks and downsides to keep in mind. Here are a few things to note before you apply for and begin using a business credit card.

Interest rates

Every credit card will be subject to interest charges if you hold a balance from one month to the next (versus paying off the total balance in full) unless the card also has an introductory 0% APR offer for a period of time. This interest rate is based on factors such as the current federal prime rate and your creditworthiness.

The higher the interest rate on your LLC’s credit card, the more you’ll pay on your card’s balance if you don’t pay it off each month. This can easily spiral into paying hundreds, if not thousands, of extra dollars each year in interest charges alone.

Annual fees

Some cards charge annual fees, which is the cost of simply holding that card each year. If you’re able to utilize all of the card’s benefits and/or earn enough in rewards to compensate for that fee, the card may be worthwhile. However, if you’re paying to use a card that doesn’t offer much in the way of benefits, or has benefits that don’t match your LLC’s needs and function, you might be better served with a different card product.

Credit limits 

You may find that, depending on your company’s creditworthiness and history, your card is subject to spending limits. Depending on how your LLC spends money, any large purchases you need to make, and whether or not you’ll carry a balance over, these limits could affect your ability to use the card when you need it. 

Sometimes, there are also reward limits that will determine the maximum rewards you’re able to earn overall or in specific spending categories. It’s important to note these limits and compare them to your typical spending habits, as they can easily throttle your potential rewards.

Personal credit

A business credit card can still affect your personal credit in some cases. While most business credit cards are reported to commercial credit bureaus, there are some products that will show up on your personal credit report. Additionally, if you fail to make your payments as promised, many issuers will submit a negative report to your personal credit.

How to choose the right card

With all this information to evaluate, how do you choose the right business credit card for you and your LLC? The answer will be different for everyone. Here are a few considerations to keep in mind that will help you decide. 

Business spending 

Are you using this business credit card for all of your company’s spending, or just spending in certain categories? You’ll also want to consider where your business spends the bulk of its money each month.

If your spending categories are all over the place, a cash back business credit card that offers rewards on every dollar spent might make the most sense. But if most of your spending comes from airfare, hotel stays, and rental cars, a travel business credit card will help you maximize rewards and protections. 

Comparing rewards

Some business credit cards offer rewards on every dollar you spend, while others will only offer rewards in certain spending categories. Some rewards credit cards allow you to cash in your earnings for travel, gift cards, or new purchases while others only allow statement credits. The right card for you depends on how your LLC spends money each month, how much you can earn in rewards, and how you want to use those rewards.

Employee credit cards

Which of your employees is authorized to use your business credit card? Will you need multiple cards for other business partners, or for contractors such as your accountant or CPA?

Some business credit cards make it easy to issue and manage employee credit cards for authorized users, even setting individual spending limits for each card. You may even be able to find one that gives you the card management tools you need and offers free cards for other users.

Annual fees

Not all annual fee credit cards are bad, and in some cases the rewards and benefits you earn more than make up for the cost of a card. However, it’s important to weigh a card’s annual fee against the value of benefits you’ll actually use before applying, to make sure you’re picking the right product. In some cases, finding a no-annual-fee business credit card makes the most sense for your LLC.

Welcome offers

A welcome offer, also called a sign-up bonus, is a great way to earn a large amount of points or miles on a new card in exchange for meeting a certain spending threshold in the first few months. If you already have big business purchases to make, finding a card with an enticing sign-up bonus can be a great way to boost your rewards and even compensate for a card’s annual fee.

Application process and requirements

The process of qualifying for a business credit card is slightly different from qualifying for a personal credit card.

Documentation needed for application

Each issuer’s requirements will vary, but you’ll typically need to provide the following documents for a business credit card application:

  • Required business documents, such as your LLC’s formation paperwork, previous tax returns, and EIN
  • Proof of a business bank account, which shows that your company is separate from your personal finances
  • Information about your business, including its industry, operations, and purpose

You should also be prepared to have your personal credit pulled, especially if your business is newer or doesn’t have a strong enough credit history to stand on its own. 

Read more: How to get a business credit card with your Employer Identification Number (EIN) only

Business credit cards vs. personal credit cards

Building credit with LLC business cards can be easy if you start off on the right foot. There are a few important distinctions to make between business credit cards and personal credit cards, even though the two have some overlap. 

Similarities between business and personal credit cards

  • Both business and personal credit cards can be reported to the credit bureaus and may affect your credit score.
  • Personal and business credit cards will typically be subject to a credit limit, which dictates how much you can charge to the card at any given time.
  • Fees are common on both business and personal credit cards, though there are no annual fee credit cards available for both individuals and businesses.
  • If you hold a balance on either a business or personal credit card, your account may be subject to finance charges. Your credit card’s interest rate depends on factors such as your credit history, credit score, and current benchmark rates.
  • Both personal and business credit cards may offer rewards on spending such as miles, points, or cash back. Rewards may be available on all spending or only in certain categories, depending on the card.

Differences between business and personal credit cards

  • Business credit cards are only available to those with a verifiable business, while personal credit cards are available to any eligible consumers who qualify.
  • A business credit card is intended for company spending by the business owner and any authorized partners or employees. Personal credit cards, by contrast, are only intended for an individual’s own personal spending (or that of their authorized users).
  • The rewards programs on a business credit card are usually structured to include typical business spending (like advertising, office supplies, and postage), while personal rewards credit card programs may be tailored to individual spending habits (like gas, groceries, and streaming services).

Why building business credit is important for your LLC

The activity on most business credit cards will be reported to the commercial credit bureaus. Like a personal credit report, your business credit is an important factor that can impact your company’s creditworthiness and future activity.

Establishing and maintaining a good business credit score is imperative if you want to:

  • Take out a loan or line of credit for your LLC in the future
  • Increase your company’s credit card limits for more flexibility and security
  • Build your company’s financial strength rating
  • Earn more favorable terms and arrangements with vendors and suppliers
  • Qualify for lower business insurance premiums
  • Avoid being asked to personally secure business debt, since your business credit will be strong enough to stand on its own

Types of business credit cards

When shopping around, you’ll find that there are a few types of business credit cards available today from each of the major card issuers. The right one for you and your LLC depends on how you spend, how much you spend, who will be using the card, your business history, and how you prefer to earn rewards (if any).

Not all business credit cards are the same, nor do they offer the same features and benefits. Most business credit cards fall within the following categories:

  • Cash back business credit cards Cash back business credit cards reward users on monthly spending with a low percentage return on every dollar spent.
  • Rewards business credit cards — As the name suggests, rewards business credit cards earn incentives on overall spending or spending in certain categories, which is typically earned in the form of miles or points that can be redeemed for statement credit, travel, purchases, gift cards, and more.
  • Travel business credit cards — Travel business credit cards either offer travel-related benefits and protections as a standard perk, earn rewards on travel-related business spending, or both. 
  • Secured business credit cards — If you’re unable to qualify for a typical business credit card, a secured business credit card can be a great way to get your foot in the door, help your LLC get approved for a business credit card in the future, and begin building your business credit in exchange for a secured cash deposit. 

FAQs

Yes, a new business can qualify for a business credit card. You’ll typically need to have strong personal credit and it helps if you have documents proving that you own your small business. 

The Ink Business Preferred® Credit Card is Business Insider’s choice for most LLC startups, topping our list of the best business credit cards.

Most issuers check the applicant’s personal credit score as part of the qualification process for small business credit cards. In most cases, your credit score will only take a small hit, and the hard inquiry will drop off with time. 




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